CI revises its bid for DundeeWealth

CI Financial Income Fund has tweaked its hostile takeover bid of DundeeWealth. The company now says DundeeWealth can keep its agreement with Scotiabank.

CI will still offer 0.75 of a CI Financial share for each share of DundeeWealth. This works out to be the equivalent of $20.25 for each DundeeWealth share, a 52% premium on their September 24, 2007, closing price of $13.31.

In an interview with Advisor.ca, CI Financial’s CEO, William Holland, says his company is most concerned with the acquisition of DundeeWealth’s other businesses, which includes a large network of financial advisors and mutual fund company Dynamic Mutual Funds. He adds that CI is willing to acquire DundeeWealth without its banking unit if that’s a major obstacle to reaching an agreement.

“It would be great to have a bank, but it doesn’t preclude our interest in DundeeWealth. I don’t know this for a fact, but if that was a condition causing the problem, then we’ve taken it out,” Holland says.

CI’s bid is also taking a less hostile approach. Holland says he’s personally talked to DundeeWealth chairman Ned Goodman and agreed not to proceed with a formal offer to Dundee’s shareholders without the recommendation of its board of directors.

“We would still be prepared to make an offer without the condition that the transaction with the Bank of Nova Scotia not proceed, provided the offer was recommended by the DundeeWealth board,” Holland says.

If the bid was approved, Holland says CI would reluctantly trade its shares for Scotiabank’s 18% stake, effectively making Scotiabank one of the larger shareholders in CI, along with Sun Life Financial, which controls 36.5% of CI’s shares.

Frank Switzer, director of public affairs for Scotiabank, says the bank has no comment on CI’s revised bid.

Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com